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Corporate Social Responsibility efforts of a company are on a purely voluntary basis. However, as demand is increasing more and more firms try to set up a CSR department in order to stay competitive.

Are there any formal regulations that firms can follow?

There is the attempt of ISO 26000:2010 to provide guidelines for developing and implementing a CSR strategy.
However, Jo Bilson, management consultant, criticises in her blog post the lack of any formal regulations concerning CSR efforts. This is also emphasized on this website. Here it is pointed out that ISO 26000:2010 is “not a management system standard”. It can not be understood as a certification since there are no approved norms concerning CSR. Thus, it is merely an attempt to assist firms that are concerned about their corporate sustainability.

Atos, an international IT service company, makes use of a different approach:

GRI-Global Reporting Initiative

GRI is a non-profit organization that developed a Sustainability Reporting Framework that is also used by Atos. In their CSR report 2011, Thierry Brenton, Chairman and CEO, proudly pronounces Atos success in the GRI rating program. Atos was awarded an A+, which is the highest possible ranking. Becaus of this ranking, Atos declares themselves to be a “sustainablity leader”. This is what Elaine Cohen, CSR consultant, criticizes in her blog “The A+ Myth of Sustainablity Reporting: Stop the Hype”. She wonders whether the achievement of an A+ level is conterminous with “sustainability leadership”? According to Elaine Cohen, the so called “GRI reporting standards” are rather setting standards on how to improve a firm’s reporting level rather than focusing on the report substance.

Right after the foreword of the CEO, the CSR report provides some key performance indicators in terms of money.

Jo Bilson supports Atos’ mention of financial achievements in a different post “Budgeting for Corporate Social Responsibility”. Here she assures that investors and other stakeholder increasingly demand transparent and accurate financial statements of companies. The financial budgeting plays a major role in this context. Bilson emphasizes the necessity of a well-structured CSR budgeting process. One advantage Bilson sees when improving a firm’s CSR budgeting process is the ability to free up cash by optimized accuracy of cash flow reporting that then can be used for CSR strategies.

According to Bilson one main failure of missing regulations is due to the notion of voluntariness that CSR is surrounded by. Since standardization is not given, Bilson complains, that especially CSR reports of transnational firms are harder to evaluate and compare.
Moreover, Bilson warns that due to the lack of formal regulations, managers responsible for CSR might see their opportunity to increase their power position within the company.

Generally spoken, she criticizes the actual trend of adopting Corporate Citizenship within businesses. She underlines her argumentation by referring to Milton Friedman’s famous article in The New York Times Magazine. According to Friedman the only “social responsibility of business is to increase its profits”. Friedman calls businessmen, attempting to convince the world that they have real social consciousness, “unwitting puppets of the intellectual forces”.

Finally, if we believe in Friedman’s words then:

“there is one and only one social responsibility of business-to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

Opponents of CSR argue that resources spent on other than economic goals are an unnecessary waste of it. However, as I have already mentioned in my last blog post CSR strategies can actually come along with a range of benefits that can outweigh its costs. CSR engagement can really become a necessity for well-organized and well-structured business. Now, the questions raises:

Where do I get a skilled and valuable CSR manager from?

When thinking about NGOs and large companies putting all their efforts into their salient goal of profit, I did not expect the two to work hand in hand to improve sustainability. Yet, a very interesting blog post of Vijan Kanal proved me wrong. Continue reading →

Recycling-one of the may simplest ways to contribute to a better environment. For some it’s cumbersome, for some it’s natural and for some it’s business.

Sustainability within firms has gained more and more interest within the last years. If firms want to differentiate their products from similar brands, they try to do something special, something good, something in the actual customer’s interest. Continue reading →

When first being confronted with corporate social responsibility, I thought that a firm’s sustainability approaches restrict their ability to maximize profits. However, I learned that CSR can actually contribute to better innovation and development within a firm as I stated in my last blog post about CSR. Now, I want to have a closer look on that aspect!

What do managers think about CSR programs?

Is it in their personal interest?

Can their firm be profitable while spending enormous amounts of money on CSR strategies?

Last week I wrote about agricultural start-up businesses in the third-world, in Nicaragua. So this week I would like to focus on a local business idea in Berlin that is pretty new and came up short time ago.

Due to the ever growing petrol prices, more and more people decide to go by bike rather than use a car. Therefore bicycling plays an increasing role as a means of transport, over all in cities, for more and more people. The idea of the start-up company “Fahrer” was to individualize bicycling, to make cycles be eyecatchers. But the products of “Fahrer” should not only be individual, but also provide more comfort for bikers and support their mobility. Continue reading →

This is about Corporate Social Responsibility. Impressive word.
But what does it mean?
A blog I found states:

“Corporate Social Responsibility (CSR) is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” Continue reading →